"I look forward to welcoming Motorolans to our family of Googlers"

Subject: General Tech | August 15, 2011 - 10:26 AM |
Tagged: purchase, motorola, google

The tech world is always going through changes; much like life in a pond, the small things either grow into big things or something big eats them.  Motorola was once a big fish, but went through some lean times, losing about $4 billion from 2007 to 2009. They started off more than 50 years ago, designing chips for radios and TVs and even providing communication chips to NASA for many missions including the first moon landing.  From there they sold off the TV portion to a little known company called Panasonic, so that they could focus on their communications chips and to start dabbling in what became the 6800 and 68000 series of chips.  Those chips powered Amigas, the original Apple MacIntoshes; even the joint IBM and Apple PowerPC chips were Motorola and that architecture is still used today.

As of today that once big fish is now a part of Google, as they purchased it at a premium of 63% above market value.  That is certainly a decent deal for stockholders and may well be a great deal for Motorola employees as well as they move to a strictly Android based development regime. That may lead to some interesting times in the future, as Google claims that Android will remain open and run on any architecture.  However, now that they own a complete closed development chain, in the form of Motorola's patents and hardware, the open philosophy may run counter to the development of hardware.  John McCarthy of Forrester Blogs, as well as many others are following this story; though it will be quite a while before we know the full repercussions of the purchase.

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"Earlier this morning, Google announced its intention to buy Motorola Mobility for 12.5 Billion in cash or $40/share. There are three broad justifications for the deal:

  • Access to the Motorola patent portfolio which it could then license to partners like HTC and Samsung to protect against the long arm of Apple's lawyers.
  • An integrated hardware/software play to compete with Apple. The problem with this logic is that the deal does not address the fragmentation on the Android platform which is the bigger issue.
  • The set-top business to bolster its lagging Google TV offering."

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